Monday, October 14 2019 13:47
Naira Badalian

Expert: The draft state budget of Armenia for 2020 does not create  the prerequisites for the implementation of the economic revolution

Expert: The draft state budget of Armenia for 2020 does not create  the prerequisites for the implementation of the economic revolution

ArmInfo. The Armenian government is clearly aware of the economic realities, as a result of which, despite adjusting expectations for GDP growth from 4.9% budgeted by  the end of the year to about 7%, by the end of 2020 it predicts only  4.9% growth.  Head of the Chair of Management and Business of YSU  Karlen Khachatryan stated this in an interview with ArmInfo  correspondent.

It should be noted that according to the state budget of Armenia, GDP  growth in 2019 will amount to 4.9%.  Already in the budget for 2020,  the Ministry of Finance adjusted its expectations to 6.3%, in the  latest forecast of the Central Bank of the Republic of Armenia this  indicator was raised to 6.9%. Nevertheless, yesterday, Prime Minister  of Armenia Nikol Pashinyan said that the republic will close the year  2019 with economic growth within 7%. Nevertheless, the draft budget  for 2020 predicts by the end of the year GDP growth at the same level  of 4.9%. According to Moody's agency, in Armenia, real GDP growth in  the medium term may reach approximately 5.5-6% over the next few  years, the Eurasian Development Bank (EDB) forecasts a 6% GDP growth  in 2019, and the World Bank - 5.5% with a slowdown in 2020 to 5.1%,  and 5.2% in 2021.

According to Khachatryan, no matter how much the authorities and the  expert community have announced monthly positive indicators for the  growth of economic activity from 6% to 7% or more, it is clear that  the statistical data on the share of such factors as car imports from  third countries are quite large. And this source will be blocked from  January 1, 2020 with the introduction of new pan-Eurasian rules for  the customs clearance of vehicles. Of no small importance is the  specific gravity of the mining industry, which has seriously suffered  due to the suspension of the construction of the Amulsar gold mine.

All this, according to the expert, suggests that the inertia of the  economic development of Armenia in 2020 and subsequent years will be  in jeopardy, which is why the government's restrained forecast for  GDP growth is due. "As a result, the Armenian government, despite the  fact that today it collects more revenues due to, inter alia, tough  administration, is not inclined to spend a lot at present to avoid  problems in the future, forming appropriate reserves," the economist  said.

According to the expert, the budget for next year is committed to old  traditions. "Unfortunately, the state budget for 2020 is built  according to the old logic - the same structure, the same  appropriations by sectors.  In general, the state budget for 2020  does not create the prerequisites for the economic revolution,"  Karlen Khachatryan concluded. 

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